Today is the Breckenridge Rubber Duck Race. Over 10,000 ruber ducks of various shapes and sizes are launched from the Maggie Pond at the Village at Breckenridge to begin their voyage and race to the finish line at the River Walk Center on the Blue River. The event is held to raise money for the Summit Foundation, Summit County's local charity foundation. Prizes are won in various categories.
There is a possiblity that the design for the I-70 railway corridor could start as soon as next year. The Rocky Mountain Rail Authority meeting activity has picked up pace for this $20 billion project. The railway would run from Denver International Airport to Eagle, passing through Summit County on the way.
An official ribbon cutting ceremony was held at Saphire Point, the top of Swan Mountain Road for the ground breaking of construction of a new portion of the Summit County Rec/Bike Path.
The vision is to complete the path to circle Lake Dillon. This portion would be completed by fall of this year. There are currently over 78 miles of paved bike paths!
2009-07-24 14:36:06
Just a reminder for all those property owners selling their properties and for all those renting theirs out. As of July 1s, 2009, the new Colorado House Bill HB 09-1091 became effective. If you are trying to sell or renting out your single family home, townhome or condo you are required to install certified carbon monoxide detectors. The detectors need to be either battery powered or mains powered (plug in or direct wire) with a battery backup. They need to be installed within 15 feet of the entrance to each bedroom or other room lawfully used for sleeping purposes, or in a location otherwise specified by an applicable state or local building code.
For those of you who have visited Breckenridge, especially in summer and heard locals talking about the Breckenridge lobster, well here it is.
Normally around early July the lobster shaped snow formation that occurs during snowmelt appears for all to see on the Horseshoe Bowl on Peak 8. Now you know!
The National Repertory Orchestra held it's first Porch Series on Friday 19th June on the porch of Breckenridge Associate's historic building located at 229 S. Main Street, Breckenridge. The National Report Orchestra consists of the creme de la creme of young musicians from across the nation. The next Porch Series venues will be held at Breckenridge Associates on July 10th, 17th and 31st at 5.30pm.
In 1859 a group of mining prospectors created a little town called Breckenridge. This year the Town is celebrating the 150th anniversary through events under the auspices of the Breck150. From a small poor settlement to the wealthy gold mining town during the gold rush and resulting in the town as it is today, the most visited international ski resort in the United States, the history is rich. To learn more about the celebratory events, visit http://www.breck150.com/
Summit County applications for building permits have almost ground to a halt. According to the Summit County Builder's Association the number of permits pulled year to date is just 8.
Home starts
Summit County single-family home starts tell the story of decreased construction activity
Breckenridge Defensible Fire break space regulation
2009-05-28 09:06:46
Breckenridge Town Council is finalizing a regulation enforcing homeowners to create a defensible space around their homes for life and property protection in the event of a forest fire.
Upon the recommendations of the Red, White and Blue Fire Department this would require all home owners to establish trees or groups of trees within 30 feet of a structure to be well-spaced — by about 10 feet — and well-pruned. Within 75 feet of a structure, trees’ crowns would need to be separated by at least 10 feet.
Town Council plans to have this new ordinance effective as of July 1st, 2009.
Breckenridge Town Council voted to give concessions on parking fees and restrictions this summer and also next ski season, 2009/2010.
During the month of May there will be no enforcement of the three-hour parking limit. The Town's paid parking lots, F-Lot, Tiger Dredge, Wellington and E. Sawmill are free until October 31st, 2009.
Overnight parking is permitted in the above mentioned lots but vehicles must be moved after 24 hours. Overnight parking is also allowed in the three hour lots but the vehicles must be moved by 10.00am.
Residential Permits: These allow long-term tenants or primary residence owners to park in excess of three hours and overnight in designated areas. Tenants or owners can obtain guest permits too.
Employee Permits cost $25.00 for all designated areas. Thes permits allow an employee to park for a greater period than the three hour limit. This is on a first come, first serve basis. The Tiger Dredge Employee Parking fee is being reduced for the 2009/2010 season from $350.00 down to $250.00. These permits are limited in number.
Many, many homeowners' are confused and puzzled about why their taxes have gone up this recent tax assessment period.
The Colorado Statute for this period is between Jan 1st, 2007 to June 30, 2008 for right or wrong. During this period, Breckenridge and Summit County had high appreciation across all types of real estate. This is the period that is used for the new taxable values. In 2011, they will take the values based upon the period of Jan 1st, 2009 through June 30th 2010. As we all know, currently we are selling property averaging currently in the 2006 price averages.
This is what I got out of a meeting:
·For the 18 month period that Colorado law states they must get comparables (January 1, 2007 – June 30, 2008), the county saw some very dramatic increases in property values.
·Land in Breckenridge was up on average 99%, which means some were even more than that.
·In the adjustments on the comps, they have a “Time Value” adjustment that you will have to get from the Assessor for each area. If a property sold at the beginning of the time period, you must figure in the Time Value factor to get to what the value may have been on June 30, 2008.
·The Notice of Valuation that was sent out to everyone should have had the comps that they used at the bottom of the page. It shows the Time Adjusted Price, but not the other adjustments. You must contact the Assessor’s office to get the Grid Adjustments to see exactly how they compared these properties.
·Some people think that because of the Bruce Amendment, taxes can only increase 5%. This is confusing, but it actually refers to the amount the county can collect totally (if I understand this correctly). If Sales Taxes are down, they can make it up with property taxes. If taxes are going to be above the amount with all tax collections, they may need to lower the Mill Levy. It is very possible that the Mill Levy will be decreased this year because of the huge increase in Property Values. It won’t happen in Breck though. Breckenridge De-Bruced. They can raise taxes as much as they want to.
So the average for sales in that given time could be lower than what the “Time Value” adjustment amount could be, because properties during that time were on an appreciation % going forward in time. This is where the controversy comes into play!
The Time Valuation Adjustment method assumes that over a period of time from the last useable sale comparison, the subject property is either going up in value or down in value. The Assessor bases this on the statistics of property sales based on the whole year. However, annual statistics do not reflect a trend that can be happening in the latter half of a the year or from a certain point in the year going forward. In the instance of this particular assessment period, 01/01/2007 through 06/30/2008, total sales and volume started to plummet in late 2007 and got progressively worse in 2008. All Realtors in the county will tell you that the inventory was increasing and list prices were being reduced in late 2007 and all the way through 2008. Hence, why would the Assessor's office show an increase in property valuation for the same period in time? They would look at total sales averages for the whole year as a basis for the time adjustment. Well, when you look at the total averages for the year, our County did see significant appreciation. However, this skewed figure is based upon dividing the very few sales that occurred in 2008 by the prices of those properties.
For example, if you only had 20 vacant land sales for the total of the year and nearly all of those sales occurred early in the year, compared with 165 vacant land sales in the prior year, and the average price of those few 20 sales had increased in price by 20% compared to the year prior, then yes, the stats show that lots values increased by 20% for the year. It does not show the truth about what happened for the rest of the year. The market was collapsing. No sales happened for the rest of the year and if there had been they would have been for a lot less than what happened in the first part of the year. Also, if some sales had happened the second half of the year, they would have brought DOWN the total average sales price for the year. Even then it would not be accurate from a Time Value Adjustment (TVA) point of view, because it would only lower the total yearly average. If a seller had been lucky enough to sell their lot in the latter part of the year at the reduced list price it would have shown a 20% decrease since the last sale! TVA is used when there are no sales going forward to use as a direct comparable sale, or at least that is how it should be used.
So this I think, shows that the Time Value Adjustment method that the County has adopted is questionable.
More road improvements are scheduled on Highway 9 between Breckenridge and Frisco this summer.
Federal stimulus money will help towards improving and widening to four lanes the portion of Highway 9 between Valley Brook Road and Coyne Valley Road. Colorado Department of Transportation planners stated that earlier bids for various projects are averaging about 12 percent less than what the agency previously budgeted. Any budgeted money remaining would be used to improve and widen to four lanes the portion of Highway 9 between Valley Brook Road and Fairview Blvd.
Colorado Department of Transport is also planning to repave Interstate 70 between the Eisenhower Tunnel and Vail Pass.
The Summit Association of Realtors invited Dr. Lawrence Un, chief economist for the National Association of Realtors to speak yesterday at the Keystone Conference Center to a full house.
“Colorado is one of the key growing markets. The long-term outlook is extremely bright,” said Dr. Lawrence Yun. "Projected growth will continue to fuel demand for homes in Colorado."
Based on several factors like a strong housing rebound in California and incentives from the economic stimulus package, Yun said the market is bottoming out. Sales volume could climb 10 to 20 percent in the second half of this year, he said.
But the housing market overall still faces some tremendous challenges, including unemployment that’s expected to climb into double digits and very low levels of consumer confidence.
Yun compared the current recession to the last sustained downtum in the early 1980s and said it’s worse this time around because home values are falling, with declines of 30 to 40 percent in some parts of the country. That has led to a $3 trillion drop in real-estate value from the peak of the market.
In some previous recessions, home values continued to grow, helping consumer confidence and buffering the impact to the real-estate market, however, that is not the case this time around.
“It feels worse this time because people’s lifetime savings have evaporated, and home values are actually falling. Growth is weak because consumers have given up. ... Spending is contracting at a really fast rate,” Yun said.
Real Estate the root foundation to economy?
Yun said there is growing consensus among political and economic decision makers that spurring the housing sector could be one of the keys to overall economic recovery.
Despite high unemployment, there are still people with the financial capacity to buy. The question is how to get them back into the market? Many people are playing a waiting game, hoping for prices and interest rates to drop even more.
"That can become a self-fulfilling prophecy, with unintended and negative impacts to the rest of the economy," Yun said.
"To counter that, the National Association of Realtors is pushing for specific policy measures, including interest rate buy-downs, low fixed mortgage rates, low subsidized rates for refinancing and permanently higher loan limits of up to 125 percent of median home prices."
Investment Property And Second Home Market
Over 70% of Summit County’s real-estate market consisits of second home and investment property transactions, a sector that has been hit especially hard by the credit crunch. The supply of jumbo loans needed to finance second homes and condo-hotel loans dried up as the bubble burst.
"A general improvement in the credit climate would help, and the government could also step in by having the federal reserve buy jumbo loans," Yun suggested.
“We have a lot of buyers, but we’re working in a challenging lending environment,” said Smith-Allen, a local Realtor. “The rules have changed,” she said, referring to conditions imposed on buyers, sometimes at the last minute.
"For the long-term, the second-home market in areas like Summit County could be in good shape, helped by a wave of baby-boomer retirement and a generational transfer of wealth," Yun said.
New Construction Starts
It’s more difficult to find good news on the home-building front, at least for the short-term, Yun said. For now, a glut of housing inventory will likely suppress recovery for the next year at least.
Builders need to take a long-term view, realizing that continued population growth in the country will at some point fuel demand for new homes.
But for now, local builders like Dave Koons are retrenching. Koons said he expects very little in the way of new home starts in Summit County this year. Some builders have already moved away for lack of business.
Koons is refocusing part of his business to retrofit existing homes with energy-efficient upgrades. Federal funds for those activities should spur consumers to consider those upgrades, he said.
“It’s not real good and I don’t think we’ve seen the bottom yet. I don’t think we will until we see a loosening of the credit market,” Koons said. “There’s just no financing for spec homes,” he said, referring to the practice of building homes on credit with the expectation that they’ll quickly sell.
Breckenridge community development director Peter Grossheusch said it’s still too early to tell what the summer will bring. For the past few months, the number of applications has dropped compared to last year, but it’s still early in the season, he said.
“We’re down, but we’re starting to see some activity,” he said.
“People are talking about remodels, but I’ve heard very little about starts,” said local builder Mark Sabatini.
Summit County fairing better than others
Summit County will hopefully avoind some of the worst impacts seen in Pitkin County. The Aspen Times reported that there is a “potential sea of unbuilt or half-built buildings” at Snowmass Village, where developers suspended work, citing an inability to secure financing. Construction on the partially built Little Nell Residences Snowmass stopped last week for the same reason, according to The Aspen Times.
"Summit’s big base-area projects at Breckenridge are on track," according to Vail Resorts spokeswomen Kelly Ladyga.
“One Ski Hill Place is on schedule to be completed in 2010,” she said, adding that other big Vail Resorts projects in Eagle County are proceeding as scheduled.
But further out on the horizon, a planned hotel at the base of the new Keystone gondola is on temporary hold.
This article is from the National Association of Realtors and describes the national statistical data on second home sales and investment property sales in 2008. It is reflective of our sales here in Breckenridge and Summit County too.
WASHINGTON, March 30, 2009
The combination of vacation- and investment-home sales slipped to 30 percent of all existing- and new-home transactions in 2008, according to the National Association of Realtors®.
However, more than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision.
The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while another 9 percent were vacation homes, compared with a 12 percent market share in 2007. The total share of second homes declined from 33 percent of all transactions in 2007. In 2005, the peak year for home speculation, 40 percent of sales were second homes.
NAR’s 2008 Investment and Vacation Home Buyers Survey shows vacation-home sales dropped 30.8 percent to 512,000 last year from 740,000 in 2007, while investment-home sales fell 17.2 percent to 1.12 million in 2008 from 1.35 million in 2007. Primary residence sales declined 13.2 percent to 3.77 million in 2008 from 4.34 million in 2007.
Lawrence Yun, NAR chief economist, said the findings are understandable given the economic backdrop. “We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases,” he said. “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”
Despite weakening second home purchases in 2008, the long-term demand looks favorable because there are large numbers of people in the prime years for buying a second home. Currently, 39.2 million people in the United States are ages 50 to 59 – a group that dominated sales in the first part of this decade. An additional 44.8 million people are between 40 and 49, and another 40.7 million are 30 to 39.
“While economic factors can affect sales from one year to the next, the fundamental demand from these large population groups will remain,” Yun said. “Given that most people become interested in buying a second home in their 40s, the bulge of population approaching middle age should drive the second-home market over the next decade.”
The median price of a vacation home was $150,000 in 2008, down 23.1 percent from $195,000 in 2007. The typical investment property cost $108,000 last year, which is 28.0 percent below the 2007 median of $150,000.
“As in the market for primary residences, it appears that many sales of deeply discounted distressed homes are pulling down the median price in the second-home market as well,” Yun said.
In this environment, NAR says it’s important to work with a Realtor® who is knowledgeable about the local market to solve potential problems and navigate the transaction process.
Yun said lifestyle considerations are the single most important factor in the vacation home market. “People are buying weekend homes or recreational property to use themselves or for a family retreat – investment considerations are secondary for most vacation-home buyers with relatively modest interest in renting.”
The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence; 35 percent were within 100 miles and 36 percent were 500 miles or more.
When asked about their reasons for purchasing a vacation home, 89 percent of buyers wanted to use the home for vacation or as a family retreat; 27 percent to diversify investments; 27 percent to rent to others; 26 percent to use as a primary residence in the future; and 17 percent for use by a family member, friend or relative.
In terms of location, 26 percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb, and 8 percent in an urban area or central city.
Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or rowhouses, and 7 percent other.
Sixty-nine percent of vacation home buyers and 84 percent of investment home buyers purchased existing homes; the rest purchased new homes.
Investment-home buyers in 2008 had a median age of 47, earned $85,000, and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
When asked about the most important reasons for purchasing an investment home, 58 percent said to provide rental income; 38 percent to diversify investments; 19 percent for use by a family member, friend or relative; and 15 percent to use for vacations or as a family retreat.
Twenty-eight percent of investment homes were purchased in a suburb and another 20 percent in an urban or central city area, 23 percent in a rural area, 22 percent in a small town, and 6 percent in a resort area.
Sixty-four percent of investment homes purchased in 2008 were detached single-family homes, 22 percent condos, 8 percent townhouses or rowhouses, and 6 percent other.
Vacation-home buyers plan to keep their property for a median of 12 years; 58 percent plan to keep their vacation home for 11 years or more. Investment buyers plan to hold their property for a median of five years.
Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 71 percent of primary residence buyers.
The size of the second-home market is significant. NAR’s analysis of U.S. Census Bureau data shows there are 8.1 million vacation homes and 40.5 million investment units in the United States, compared with 75.5 million owner-occupied homes.
NAR’s 2008 Investment and Vacation Home Buyers Survey, conducted in March 2009, includes answers from 1,924 usable responses. The survey controlled for age and income, based on information from the larger 2008 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents
Summit County Property Taxes To Go Up Not Down In 2009
2009-03-17 13:56:53
Summit County Assessors office is predicting that single family home taxes will go up this spring not down. The formula for calculating such based on real-estate sales between Jan. 1, 2007 and June 30, 2008.
Since the cut-off date last summer, the volume of sales in the local area have plummeted, but prices have not. This defies most markets in the US.
Government Affairs Alert: Proposed Shared Driveways Ordinance Revised
The Breckenridge Town Council has been considering a ordinance that would prohibit parking on shared driveways within the town limits except in approved spaces. That language would have prohibited a homeowner or guest from parking on a shared driveway even temporarily. Late last week the town attorney removed the contentious language from the proposed ordinance.
The revised ordinance will be proposed to the Town tomorrow night, but it will only limit parking on a shared driveway that blocks or hinders lawful access or which blocks emergency vehicles. The part about no parking at all on shared driveways has been removed entirely.
The Summit Association of REALTORS® is now comfortable that the proposal does not violate private property rights, and will not oppose the measure at tomorrows council meeting.
If you have any questions regarding this issue, please feel free to contact Sarah Thorsteinson, SAR government affairs director, at 970.393.3939 or by email at sthorsteinson@coloradorealtors.com.
The goal of the proposal is to help protect homes in Breckenridge from wildfires. The Fire Chief indicated the first goal of the fire department is to save lives, and they are working on evacuation plans with the county. The second goal is to save homes. Studies have shown that creating a defensible space around homes is likely to save the home. Under the proposal, landowners (vacant lots) and homeowners would be required to create this defensible space in zones around their homes. The first zone would go out 30 feet from the eave of the home. Homeowners would not be required to clear cut trees, but would be required to cut a few trees down, clear ground fuel (fallen trees), and limb up existing trees. New plantings would not be required to be cut down. Zone 2- (30-75 feet from the eave) would be where more trees would be cut down. Dead, diseased trees would be required to be removed, and crown spacing would also be required. The town has said they would allow clumpings of trees to ensure some level of privacy in this zone. The fire department would send people out to each home to develop an individualized plan of action for that property. Each homeowner would be required to obtain a permit and pay $45 for that permit. Then homeowners would be given a year to implement that plan. The town is also imposing the ordinance on themselves and will be working to create defensible spaces around town property. Open space is also working on creating defensible spaces, too.
It appeared to be a good plan with a laudable goal. The county expects 95% of lodge poles to be dead within 4 years. Wildfires are imminent and it make sense to have a plan. However, there are a number of concerns with the plan in its current form:
1.The town is working on identifying “priority areas” within Breckenridge for immediate mitigation. Several homeowners raised concerns that by identifying priority areas,people who live within these areas may have a difficult time obtaining homeowners insurance, or if they have insurance, their rates may go through the roof.
The Council was very concerned about this issue and unanimously wanted to ensure that the ordinance would not raise homeowners insurance rates.
2.The cost of creating a defensible space could be high for homeowners, depending on the property, and the amount of mitigation needed. Staff indicated the cost could range from $400-$4800, but one of the planners did see a few cases where homeowners spent $10-$30,000 on beetle kill removal, which is slightly different.
The council was also concerned about imposing financial hardships on citizens. Staff indicated they would be trying to get as much grant money as possible, or that they could work with homeowners to allow them 2 years to fully create a defensible space.
3.The requirement of a fee to create the defensible space. Citizens thought it was ridiculous that they would have to pay a fee when it was required by the town. Town staff said the fee would cover the cost of having the fire department come to your home to create a plan. The fee would also not be required if no work was needed at the property.
4.Some citizens were also concerned that the 30 feet requirement was much worse than a 15 ft requirement. The fire department and council indicated the 30 foot requirement would actually require that less trees be cut down and allow for more flexibility.
5.The council was also concerned that it may be too arbitrary and unfair.
The issue will come up again at the March 10th town council work session. Town staff is attending HOA meetings, and they will host a town hall on March 16th. Red White and Blue will be hosting a meeting on March 30th. This is not an ordinance that will be passed quickly. There will be lots of opportunity for community input before any ordinance is passed.
Breckenridge Associates Real Estate (BARE) recognized by Breckenridge Resort Chamber as "Business of the Month”
Once you've experienced a few or many local events the Breckenridge community puts together each season, you'll grow to appreciate the dedication and involvement of numerous local patrons through their time volunteering, planning and executing such a successful variety of performances and cultural activities for all to enjoy. BARE has been a long time supporter of the performing arts and values the importance of their presence in the local community.
For the month of February BARE was awarded "Business of the Month" by the Breckenridge Resort Chamber for their involvement creating and producing the 1st Annual Breck Snowflake Challenge in December and participation in the 19th International Snow Sculpting Championships (ISSC) late January. With founding members of the ISSC as BARE Partners, the snow sculpting art form is close to our hearts. After many years growing the ISSC into what it is today, BARE decided there was room for a smaller scale competition on Main Street where locals could try their hand at their own creations, competing to win cash prizes. It was a great kick of to the holidays in the Colorado high country and the response from the local businesses and community was outstanding. We hope to bring the Breck Snowflake Challenge back for a second year in December and look forward to celebrating 20 years of the ISSC next January.
BARE commits more than $30,000 annually sponsoring local organizations that keep the Breckenridge growing and thriving. Some sponsorships include: National Repertory Orchestra, Breckenridge Music Institute, Breck Film Festival, International Snow Sculpting Championships, Breck Snowflake Challenge, Little Red Schoolhouse, Backstage Theatre and more.
Breckenridge Town Council to restrict residential building sizes
2009-02-10 16:14:10
The Breckenridge Town Council is looking to restrict the size of a home or a remodel/addition that a homeowner can build within certain subdivisions in the Town limits. According to the Town Planning Departments summary, the Town is reviewing subdivisions that do not have building envelopes or set backs. With these subdivisions the town feels it will be necessary to restrict the size of a home that can be built on a vacant lot, or for an existing homehowner the size of an addtiion that would be allowed.
Their belief is that this will help preserve the quality of the neighborhoods. This is quite contraversial as is takes away existing property owners rights and restricts the potential of their property to less than what is currently allowed. Many homeowners are upset that they would not be able to improve their property to the standard or size of homes already in existence in these neighborhoods. They also feel that it would discourage revitalization of their neighborhoods and building improvements as the restrictive requirements would not allow for effective improvements on their existing homes.
The subdivisions concerned are Boulder Ridge 1 & 2, Christie Heights, Gold Flake, Highlands Subdivisions 1 - 4, Yingling and Mickles ( outside the conservation district), Peaks, Penn Lode, Sunbeam, Weisshorn, Breckenridge South, Snowflake, Brookshill, Southside Placer, Sunrise Point, Trafalgar, Trapper's Glen ( Filing 1), Tyra, Warrior's Mark, Warrior's Mark West
To learn more about this Neighborhood Protection Plan, please contact Alison Kellerman Admin for the Mayor and Council, at alisonk@townofbreckenridge.com and let her know your thoughts which she will pass on to the Council. Then please attend the meeting on Tuesday evening. Alison can also be reached at 970-453-3166.
The Vail Daily reported that for the last 15 years the prices of parking spaces near the bottom os the ski area have increased from $40,000 to now as high as $370,000. Resort developer, East West Parnters is trying to sell parking spaces near the new development called Manor Vail for $225,000 per space.
This makes just buying a condo in Breckenridge seem rather cheap in comparison, those prices would include a ski in ski out studio plus a parking space!
Breckenridge Real Estate outperforms financial markets!
2009-01-28 09:36:47
Breckenridge real estate has outperformed the financial markets for over a decade. Within the last 2 years this has accelerated especially with regards to the current financial banking crisis. The future looks extremely bright in this regard for the future too. Total build out for Breckenridge and Summit County is forecast to occur within the next 8 years which will reduce the supply of available property. Breckenridge is the most visited ski area in North America, vying for this position with its sister area, Vail. Yet currently, real estate prices are nearly half of those in Vail. Breckenridge is a convenient one hour 45 minute drive to Denver International Airport and within 30 minutes free bus trip or drive to the ski areas of Keystone, Copper Mountain, Arapaho and 45 minutes drive to Vail and Beaver Creek.
The teams start the process of creating their incredible scultpures from a huge snow cube that is about 10 feet high. They are not allowed to use powered tools. It all has to be done by hand and takes 6 days to finish. There is strategy involved as the day time temperatures during the week can vary considerably. If they get to far into the sculpture too early and the temperature is warm, there is a great risk of it collapsing. So some years they can leave much of the sculpting almost until the last day and work all through the night to finish for judging the next day!
2009-01-13 12:06:34
This winter has been a record winter with regards to snowfall to date. It just keeps on coming. The last time it snowed this much for this time period was 10 years ago! The skiing is awesome, and fantastic lodging deals are to be had this year due to the slowdown.
Well the Dew Tour hit Breckenridge this last weekend. The event is quite spectacular and the logistics of setting this up were quite amazing. Just being a local here observing the fleets of 18 wheelers coming into town with all the equipment, teams, atheletes, support crews, it was all quite amazing.
They put up these huge flood lights for the night events that could be seen driving down from the Eisenhower Tunnel! The music event at the Riverwalk Center was overwhelmed. I think over 3,000 people showed up to listen and watch The All American Rejects.
Peak 8 is a huge construction area this winter as Vail Resorts continues to build our new ski village. The cranes currently running are for the One Ski Hill Lodge construction. Eventually nearly all the existing buildings at the base of Peak 8 will be torn down and replaced with new buildings, including some retail, restaurants, lodging and more.
I have some concerns about the US real estate market right now and am not sure if this is the right time to buy when the overall market is published at being 8% down.
ANSWER
First of all you have to remember that Breckenridge and Summit County as a whole is based upon ownership in a mountain valley where nearly all the land is National Forest Land, with a very small portion privately owned that has been and can be developed. The remaining privately held vacant land is predicted to be built out within the next 4-6 years.
The Towns of Breckenridge, Frisco, Dillon and Silverthorne in conjunction with the County Commissioners and ski resort management held a conference a few years back and hired a consulting firm to help them forecast what needs to be done to maintain the quality of life in our County and its appeal. They studied other resort towns that are ahead of us and have or are at that total build out phase, where there is no more land left to build on, it is all used up and the only thing left to do is start knocking down old or existing buildings and re-developing (which is what Vail is currently doing).
This group studied traffic ramifications, water rights, schools, hospitals, affordable/employee housing etc. They got to the prediction of Breckenridge and Summit County reaching "build-out" by reviewing how many vacant and developable parcels of land there are left in the County, then taking the average number of building applications on vacant land there have been per year over the last 10 or so years and projecting going forward. That is how the within the next 4 to 6 years came about.
They then looked at towns similar to ours that have been through this phase and what happened to them. Examples are, Aspen, Vail, Telluride, Jackson Hole. As the supply gets ever increasingly slimmer, the demand continues to rise. Public opinion gets heavily weighted to prevent more growth, Town leadership and planning leadership positions get filled with staff and members with stricter philosophies about the quality and density of what should be built on the very last remaining parcels of developable land to maintain the quality and attractiveness of the mountain environment. This directly results in big increases in building costs, above and beyond the ever increasing costs of raw materials per year currently being experienced to build a home (review lumber, copper and building material costs that have risen over the last few years as China and other developing nations demand these materials too). This then has a direct affect on the values of existing properties, whereby the values start to go up significantly. Breckenridge and Summit County have not quite reached this stage, hence the huge average price differentiation between us and these other resorts. I am not saying that the pricing in our area will equal Aspen or Vail, but I think the gap will close considerably. As we get more exclusive and quality amenities the pricing of certain properties close by or having those amenities will go up. This in turn will bring the price of other existing properties up too, as the supply is now finite. Remember also, Breckenridge is currently the most visited ski area in the United States with many international visitors, also wanting to own property here.
When we had our last recession which was around the year 2000 or 2001, the market had a number of hammerhead blows. We had the dotcom crash, where the stock market took a huge hit. We had 9/11 where many, many people were afraid to fly which affected how many ski visitors would come. We had the Enron scandal, where the public now did not trust anyone with their hard earned money. We had war with Iraq and the uncertainty that would bring. We had a 4 year drought where we did not have much snow for skiing and we had Colorado forest fires. I stacking all those detrimental market conditions on top of each other over a short period of time was a good test for our real estate market here. What happened to our market in Breckenridge was that we did not depreciate. We just stagnated for about 30 months where our prices did not appreciate, it took longer to sell properties and our skier visits went down and development slowed. It was very resilient.
I had been showing investors in the late 1990's properties and they would ask what the annual appreciation would be and I would say about 8% per annum. They would tell me that their mutual funds were getting as high as 30%. Many of them decided not to invest in real estate and keep investing in the stock market. Then in about the middle of that recession I would get some of these people calling me curious about how the real estate market was. I would tell them that it was slow, but the values overall had held. Many of them told me they had lost up to 30% of their investments over this period of time and that they wished they had put some of it in Breckenridge real estate.
That episode was great for Breckenridge and Summit County in retrospect, because it showed investors that our market is quite resilient to national downturns and market conditions. We may not have all those glamorous 30% yields and really since the 1970's if you average the property values in 10 year cycles it has been about 8% mean and 10% median per year. We do not have the high risk either.
Under current market conditions, where the rest of the nation is down the tubes with regards to property markets and values, Breckenridge, Vail and Steamboat Springs went up in values last year. We were the opposite. Why would that be? Some analysts see the huge development money coming in to complete the few remaining developable parcels left in Breckenridge and Steamboat anyway. In Vail, they are knocking down and re-building as they really do not have much vacant land left. Breckenridge is getting a lot of attention because of all the quality amenities being enhanced or developed, plus compared to nearly all the other ski resort towns in Colorado, we are one of the easiest to get too.
Many professional people will still earn significant income even in a recessed market. Drs, surgeons, dentist, lawyers, oil company execs, are still doing great. They are most certainly concerned about if they should put all their money on Wall Street currently. I speak with many clients in this category and they want to invest in something more tangible, like Breckenridge real estate. It may not yield as much as some of their other investments, but I think I can say right now, the ones that have bought here are doing better with their Breckenridge real estate investment than their mutual funds!!! In other words, they are wisely diversifying and not putting all their eggs in one basket. There are or can be significant tax advantages to owning a second home or investment property too.
Also as the dollar has currently been weakening in the global currency markets, it has encouraged more foreign investment in our real estate market. This diversifies our micro economy here, where we are not just dependent on buyers or investors from one region. This adds to our resiliency in national US market downturns.
The national real estate market downturn in the United States is in the primary real estate market. Primary real estate is property bought for someone to live in year round. That market was brought down as you well know by poor lending practices to people who could not really afford the home they were purchasing; sub-prime loans. In Breckenridge and Summit County, 70% of the real estate conveyed is investment or second home properties, where it is not possible to originate a sub-prime loan. We have not been directly affected by this.
Most of my clients upon reflecting on their ownership of property here are valuing the fun and memories they have with their friends and families more than they are their monetary appreciation potential. As long as they feel safe their money is harbored as securely as anywhere else, they end up just focusing on family, friends and quality time. Their Breckenridge or Summit County property is a catalyst for that!
RECENT FEDERAL TAX LAW CHANGES TO REAL ESTATE TRANSACTIONS
2008-10-16 16:27:25
[This information does not constitute tax advice. Please consult your tax professional for specific tax
advice related to a specific transaction]
1. Property involved in a IRC Section 1031 exchange that is subsequently converted to a primary
personal residence needs to be held for at least five years as an additional qualification in order
to get the $250,000 IRC Section 121 exclusion for individuals (or $500,000 for married filing
joint). In other words, owners still need to meet the 2 of 5 rule and other rules, but the total
years of ownership needs to be at least five years.
2. Property that is a second home does not qualify as a primary personal residence (the taxpayer
can have only one at a time).
3. Property that is a primary personal residence potentially qualifies for the $250,000/$500,000
exclusion.
4. Property that is a second home Is a personal asset but does not qualify for the
$250,000/$500,000 exclusion. As a personal asset, a loss on sale is not deductible. As a personal
asset, it does not qualify as property eligible for an IRC Sec 1031 exchange if there is a gain.
5. The character of residential real estate can change if the usage changes (from/to Primary
personal residence/second home/investment/business property).
6. Taxpayers have converted rental property to a primary personal residence, lived in the property
for at least two years and then sold the property, excluding the resulting gain and using IRC
Section 121 to exclude $250,000/$500,000. Recapture of part or all of the rental depreciation as
ordinary income is still required before calculating the gain to be excluded. This option is still
available, however, a new law requires allocating the gain on the property sale between
qualified and non-qualified use. The gain allocated to the non-qualified use must be reported
while the gain allocated to the qualified gain is potentially excludable under IRC Section 121.
7. Taxpayers have acquired property in an IRC Section 1031 exchange, used the property as rental
property and later converted the property to a primary personal residence, lived in the property
for at least two years and then sold the property, excluding the resulting gain and using IRC
Section 121 to exclude $250,000/$500,000. Recapture of part or al/ of the rental depreciation as
ordinary income is still required before calculating the gain to be excluded. This option is still
available, however, a new law requires allocating the gain on the property sale between
qualified and non-qualified use. The gain allocated to the non-qualified use must be reported
while the gain allocated to the qualified gain is potentially excludable under IRC Section 121. In
addition, the property acquired in the IRC Section 1031 exchange and later sold needs to be held
for a total of five years and meet all of the other requirements in order to qualify for the Section
121 exclusion.
8. Generally the years used as a primary personal residence count as qualified use, and the years
used as rental property count as non-qualified use. For example, if a property has an $800,000
gain of which $100,000 is depreciation recapture, and the property has two years of qualified us
and five years of non-qualified use, the resulting tax effects would generally be as follows:
$100,000 would be reported as depreciation recapture income, and the remaining gain would be reported as follows. The qualified use of 2/7 X the total remaining gain of $700,000 or
$200,000 would be subject to the IRC Section 121 exclusion and the non-qualified use of 5/7 X
the total remaining gain of $700,000 or $500,000 would be reported as capital gain. A transition
rule provides that non-qualified use prior to January 1, 2009 is not taken into account and is
ignored for the revised IRC Section 121 exclusion calculation.
9. As usual, there are qualifiers and exceptions with the new laws, but the rules have generally
been tightened in the last few years making more of the gain on sale of residences taxable.
10. Taxpayers need to reassess their real estate holdings in view of the new rules.
• Since longer rental usage generally reduces the amount of gain available for IRC Section
121 exclusion, taxpayers may want to Increase their primary personal usage, cut their
rental use period and sell property while it is eligible for the maximum Section 121 exclusion.
Breckenridge and Summit County Real Estate Statistics YTD 2008
These figures come from the Summit Association of Realtors MLS as of May 1st, 2008, which encompasses over 95% of real estate transactions in the County.
Breckenridge
Single Family Homes sales so far have been 55 compared to 74 for the same period in 2007. However the average sales price has increased this year by 4.9%, $1,079,167 compared to $1,028,436 in 2007.
Duplex and Townhomes have had 23 sales this year compared to 53 for the same period in 2007 with the average sales price increasing in 2008 to $905,625, a whopping 47.4% increase.
Condominiums and Multifamily so far year to date are at 69 sales compared to 82 last year, with the average sales price increasing this year from $395,027 to $509,896, again a significant 29.1% increase.
Vacant land sales have dropped 55.6% from 72 sales in the same period of 2007 to 32 sales for 2008. However, the average sales price this year increased 57.8% from $380,173 to $599,814.
Summit County
Overall for Summit County YTD, Single Family Homes sales are numbering 100 compared to 138 in 2007, with this years average sales price at $947,600 compared to $909,189, a 4.2% increase.
Duplex and Townhomes had 71 sales YTD compared with 124 in 2007 for the same period, with the average sales price of $560,953 in 2007 increasing to $667,354 in 2008, an 19% increase.
Condominiums and Multifamily so far year to date have 217 sales compared with 277 in 2007 averaging $394,874 this year versus $345,053 last year. This is a 14.4% increase YTD.
Vacant land sales reduced YTD this year compared to last year from 53 versus 121. However, the average price increased an astounding 52.7%, average for 2007 was $343,567 compared to this year at $524,770.
The total number of listings countywide has increased by 163 listings this year to date, a total of 1,590 compared to 1,427 last year to date. This is not a significant increase, only 11.4%, considering how markets are elsewhere in the nation. It seems that pricing here in Breckenridge and Summit County is holding it's own.
Many thousands of people visited Breckenridge over the last week to view the results of the 2012 International Snow Sculpting Championships sponsored by Budweiser and Cadillac. Teams from around the world gathered to compete. Spending nearly a week preparing their sculptures the results for the top 3 were -1st Canada, 2nd Germany, 3rd Latvia/Estonia.
Tue, 31 Jan 2012 09:28:58 PST
Try Breckenridge for your next ski vacation. By the way, it is even better in Summer!
Snow sculpting artists work through the night to create their frozen works of art. The Breckenridge Budweiser Snow Sculpting Championships are sponsored by Cadillac.
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